Australian, N.Z. Dollars Advance as Investors Pare Rate-Cut Bets

Oct. 30 (Bloomberg) -- The Australian and New Zealand
dollars gained versus most of their major peers as investors
pared bets that the countries’ central banks will lower interest
rates.

The so-called Aussie and kiwi slid versus the yen after the
Bank of Japan expanded its asset-purchase fund, its main policy
tool, by 11 trillion yen ($138 billion) to 66 trillion yen.
Demand for the higher-yielding currencies recovered after being
limited earlier amid concern Sandy, the super-storm ravaging the
American Northeast, will hurt the U.S. economy.

“Our house view is that the RBA will push a rate cut to
December,” said Lee Wai Tuck, currency strategist at Forecast
Pte in Singapore, referring to the Reserve Bank of Australia.
“I’m pretty surprised by the resilience in the Aussie.”

Australia’s dollar climbed 0.3 percent to $1.0364 as of
6:07 p.m. in Sydney and fell 0.1 percent to 82.40 yen. The New
Zealand currency added 0.4 percent to 82.20 U.S. cents. It
declined as much as 0.6 percent before trading little changed at
65.34 yen.

Overnight index swaps data compiled by Bloomberg showed
traders estimate there is a 59 percent that the RBA will cut its
key rate to 3 percent from 3.25 percent at its Nov. 6 meeting,
compared with a 64 percent probability yesterday. The odds for
New Zealand’s central bank to lower its benchmark, currently
held at 2.5 percent, in December by the same amount fell to 14
percent from 18 percent.

U.S. stock trading is canceled today for a second day
because of Sandy, recently downgraded from a hurricane, joining
bond markets. The largest Atlantic tropical storm on record
claimed lives from North Carolina to New England, plunged
millions into darkness and caused damage that may add up to
billions of dollars.